User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday February 19, 2010 - 01:04:47 GMT
Forex Hound -

Share This Story:
| | Email

Stocks Plunge after Hours Following Fed Discount Rate Hike

U.S. stock indices plunged after the close following a discount rate hike by the Federal Reserve. Although the hike was not a surprise per se since Bernanke and the FOMC minutes hinted it would happen, the timing caught traders by surprise.


While not actually tightening the financial system, the Fed sent a signal that the stimulus days are ending and that more rate hikes should be expected. Stock indices sold off in post-market activity.  Earlier in the trading day, the March E-mini pierced the psychological 1100.00 barrier triggering an acceleration near a .618 retracement price at 1107.00.  Buying dried up at 1106.75 until the close.


The markets traded higher throughout the day although in a volatile manner. Weak U.S. Weekly Jobless Claims came out higher than expected, driving stocks lower this morning, but investors quickly bought the dip before rallying after the release of the bullish leading indicators report and the Fed Philadelphia survey. 


Strong economic news kept downside pressure on the March Treasury Bonds. The move by the Fed to hike the discount rate is putting further pressure on the market overnight. Technically, this market took out two key retracement levels at 117’01 and 116’14. Both of these prices are now new resistance. Downside momentum could trigger a further break to the cluster of support between 114’16 and 114’24.


The report that the Fed hiked the discount rate sent commodities sharply lower. Both April Gold and April Crude Oil broke on the news as the Dollar rose and the Euro tumbled. Wednesday’s closing price reversal top in gold was confirmed setting up a possible decline to $1086.80.  April crude oil is trading lower during the after-market session after testing a .618 retracement level at 79.17 during the day session. A follow-through to the downside could trigger a break to 74.73.


The U.S. Dollar is mounting a strong rally late in the trading session following news that the Fed is set to hike the discount rate 25 basis points to 75 basis points. While not actually beginning a tighter monetary policy, a hike in the borrowing rate charged to member banks is a sign that the Fed is getting ready to begin removing stimulus and raising other key interest rates.  The Dollar is rallying because the rate hike tightens the interest rate differential between the U.S. and other foreign nations.


On Thursday, the Dollar had a volatile trading session triggered by economic reports and rumors of intervention. The Greenback opened higher, driven by spillover from Wednesday’s strong U.S. economic data. Early during today’s session the Dollar got a boost from mixed economic news. The Producer Price Index was higher than expected, but weekly jobless claims rose. This was followed by a better than expected Leading Indicators report and Philadelphia Fed Survey.


Initially, these reports supported the Dollar but a recovery in the equity markets encouraged speculators to demand more risk. This slowed down the upside momentum in the Dollar as intra-day profit-takers took over.


The Greenback accelerated to the downside on unconfirmed rumors that China and Russia were buying the Euro. After a sharp break, conditions settled and the Dollar turned positive once again. Later in the session, it was confirmed that Russia was actively buying foreign currencies. The recent weakness in the Forex markets has driven the Ruble to a 14-month high. Both Russia and perhaps China feel the need to protect their export markets by driving up foreign currencies.


News that the Fed is planning to hike the discount rate sent the Euro sharply lower late in the trading session. The heavy selling pressure took out the recent bottom at 1.3531 although it failed to accelerate to the downside once this price was pierced.


The March Euro had an extremely volatile morning session. Stronger than expected U.S. economic reports put pressure on the Euro early in the session, but speculation that China and Russia were buyers turned the Euro around. Intra-day trailing stops were hit as the market rallied, turning the Euro positive for the day. The rally was short-lived, however, as buyers failed to support the market on the subsequent retracement. Although the Euro weakened at the mid-session, it managed to maintain the low for the day at 1.3539.


The move by Russia and most likely by China could create volatile trading conditions. According to the recent CFTC Commitment of Traders Report, over $8 billion of short positions are being wagered against the Euro. Further interventions by these two countries could create a classic battle between Russia, China and the short hedge funds.


The shorts want to see fresh money coming in so they can initiate new positions. The buyers want to create fear to encourage the weaker shorts cover their positions, thereby driving up the Euro.  It will be interesting to see if China and Russia continue to support the Euro on weakness especially since the current break is being driven by the Fed’s action. Nonetheless, intervention is out there and traders should be aware of the volatility it can create.


The March British Pound finished sharply lower. U.K. economic pressures continued to push the British Pound lower. Although there was a slight short-covering rally mid-morning, the currency was never able to turn positive. Expectations are for the Pound to continue to drift lower as fear that the U.K. recovery is falling far behind the U.S. is encouraging traders to keep up the selling pressure. The weak close has this market in a position to take out the recent bottom at 1.5534.  The action by the Fed to raise the discount rate is helping to put additional pressure on the Cable.


The March Japanese Yen plunged to the downside after it was reported the Fed was set to hike the discount rate by 25 basis points. This move by the Fed helped to increase the interest rate differential thereby making the Dollar a more attractive investment. Overnight the Bank of Japan said it would refrain from buying Japanese Bonds. This gave the Yen a slight boost until better than expected U.S. economic reports gave investors strong reasons to sell the currency.


The hike in the U.S. discount rate sent commodities lower, taking with them the Canadian Dollar. A surge in Canadian inflation underpinned the March Canadian Dollar overnight, but stronger than expected U.S. economic data turned the market around. Lower gold prices and mixed crude oil results also encouraged traders to sell the Canadian Dollar. The U.S. Dollar could rally further if the hike in the discount rate causes stocks, gold and crude oil to fall sharply.


The March Swiss Franc fell after the Fed hiked the discount rate late in the trading session. This pair traded higher earlier in the session after talk circulated that the Swiss National Bank had intervened once again. The mid-morning short-covering rally in the Euro gave the Swiss Franc a boost, but these gains were erased once the Euro turned lower for the session. The move by the Fed tightened the interest rate differential between the two countries, forcing investors to adjust their positions.



Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 31 July 2018
AA JP- Bank of Japan
A 06:00 DE- Retail Sales
A 09:00 EZ- flash HICP/GDP
AA 12:30 US- Core PCE Deflator
A 14:00 US- CB Consumer Confidence
Wed 1 Aug 2018
A Final Mfg PMIs
AA 12:15 US- ADP Private Payrolls
A 15:00 US- EIA Crude
AA 18:00 US- Federal Reserve Decision
Thu 2 Aug 2018
AA 11:00 GB- Bank of England Decision
A 13:30 US- Weekly Jobless
Fri 3 Aug 2018
A Final Services PMIs
AA 12:30 US- Employment
A 12:30 US/CA- Trade

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105